**Exhibit 10.2**

** **
| *** *** | ***CONFIDENTIAL TREATMENT***     |
|--------------|----------------------------------|
| *** *** | ***REQUESTED PURSUANT TO RULE*** |
| *** *** | ***24b-2 OF THE SECURITIES***    |
| ** **   | ***EXCHANGE ACT OF 1934***       |

 

**Certainportions of this exhibit have been omitted pursuant to a request forconfidential treatment under Rule 24b-2 of the Securities Exchange Act of1934. The omitted materials have been filed separately with the Securities andExchange Commission.**

 

**Amendment No. 3 to Hologram Agreement**

 

This Amendment No. 3 to the HologramAgreement dated as of February 28, 2003 (as amended pursuant to Amendment No. 1dated as of September 29, 2003 and Amendment No. 2 dated as of March 25,2005) (the “Agreement”) by and between MasterCard International Incorporated, aDelaware corporation with offices at 2000 Purchase Street, Purchase, New York10577-2509 (“MasterCard”), and American Bank Note Holographics, Inc., aDelaware corporation with offices at 2 Applegate Drive, Robbinsville, NJ 08691(“ABNH”), is made as of August 24, 2005.

 

The parties to the Agreement, inconsideration of the mutual promises, covenants, and conditions set forthherein, agree as follows:

 

1.0   TheAgreement is hereby amended to include the manufacture and supply by ABNH ofholographic magnetic stripes having the specifications set forth on Exhibit A3attached hereto (the “HoloMagTM”).  ABNHshall manufacture, and MasterCard shall purchase, the HoloMag under theAgreement pursuant to the same terms and in the same manner as the hologramsdescribed in Exhibit A of the Agreement in all respects other than thoseterms specifically modified in this Amendment No. 3.  Exhibit A3 sets forth the designspecifications for the **[ * ]**MasterCard HoloMag “stripe” which has been designed and originated by ABNH atABNH’s expense and which design specifications are hereby accepted byMasterCard.  **[ * ]**.  Subject to MasterCard approval, not to beunreasonably withheld, ABNH shall be entitled to subcontract certain of theproduction steps in the manufacture of HoloMag at its discretion, but ABNHshall at all times, be responsible for the security and quality of the HoloMagproduct it supplies to MasterCard.  Theprice of HoloMag shall be **[ * ]**.

 

2.0   ABNHhereby represents and warrants that HoloMag is designed and will bemanufactured to be used on payment cards in lieu of the magnetic stripecurrently used on most or all MasterCard branded cards and will meet or exceedISO Standards applicable to such magnetic stripe as such ISO Standards may beamended from time to time.

 

3.0   TheAgreement is hereby amended by deleting the first sentence of Section 1.3of the Agreement (as amended by Amendment No. 1), and substituting thefollowing sentence in lieu thereof:  “ThisAgreement shall be effective as of the date first set forth above and shallremain in effect for a period of ten (10) years from such date, unlessterminated earlier or extended as provided herein (the “Term”).

 

4.0   Theparties hereby agree that Section 13 of the Agreement (Indemnity) shallapply to the HoloMag in the same manner as such Section 13 applies to anyhologram ABNH manufactures for MasterCard pursuant to the Agreement.

 

5.0   Theparties acknowledge that notice has been given by ABNH and accepted byMasterCard, pursuant to Section 1.4 of the Agreement (as modified byAmendment No. 2), that during 2005, ABNH is moving all of its operations fromHuntingdon Valley, PA and Elmsford, NY to its new facility located at:

 
| 2 Applegate Drive      |   |         |
|------------------------|--------|--------------|
| Robbinsville, NJ 08691 |
| Tel:                   |   | 609-632-0800 |
| Fax:                   |   | 609-632-0850 |
|                        |        |              |  |  |

 

----

*Confidential

 

----

 

All references to ABNH’s facilities inElmsford, NY or Huntingdon Valley, PA in the Agreement, as amended, are herebychanged to ABNH’s facility in Robbinsville, NJ. ABNH’s facility inRobbinsville, NJ will comply with the security requirements set forth in Exhibit Bof the Agreement, and MasterCard shall have the right to inspect the facilityin accordance with the Agreement.

 

6.0   Theparties agree that except as set forth herein, the Agreement shall remainunchanged and in full force and effect.

 

7.0   AllABNH obligations as stated in the Agreement regarding holograms shall apply inthe same manner to HoloMag.

 

IN WITNESSWHEROF, the parties hereto have caused this Amendment to be duly executed as ofthe day and year first above written.

 
| MASTERCARD INTERNATIONAL | AMERICAN BANK NOTE              |
|--------------------------|---------------------------------|
| INCORPORATED             | HOLOGRAPHICS, INC.              |
|                     |                            |
|                     |                            |
| By:                      | /s/ Sergio Piñon           |   | By: | /s/ Kenneth Traub |   |
| Name:                    | Sergio Piñon               | Name: | Kenneth Traub |
| Title:                   | SVP, Security and Risk Services | Title: | President and CEO |
|                          |                                 |  |  |  |  |

 

----

 

**EXHIBIT A3**

 

 

**HOLOMAGTMSPECIFICATIONS**

 

1.0       MagneticTape Performance

 

1.1           **[ * ]**

 

1.2           **[ * ]**

 

1.3           [* ]

 

1.3.1             **[ * ]**

 

1.3.2             **[ * ]**

 

1.4           [* ]

 

1.4.1             **[ * ]**

 

1.4.2             **[ * ]**

 

2.0       HoloMagTM Tape

 

2.1           [* ]

 

2.1.1             [ * ]

 

2.1.2             [ * ]

 

2.2           [* ]

 

2.2.1             **[ * ]**

 

2.2.2             **[ * ]**

 

2.3           [* ]

 

2.3.1             **[ * ]**

 

2.4           [* ]

 

2.4.1             **[ * ]**

 

2.4.1.1             **[ * ]**

 

----

*Confidential

 

----

 

2.4.2             **[ * ]**

 

2.4.3             **[ * ]**

 

2.4.4             **[ * ]**

 

2.4.5             **[ * ]**

 

2.4.6             **[ * ]**

 

2.4.7             **[ * ]**

 

3.0       HoloMagTM Application – Authorized MasterCard CardManufacturer responsible for:

 

3.1           **[ * ]**

 

3.1.1             **[ * ]**

 

3.1.2             **[ * ]**

 

3.1.3             **[ * ]**

 

3.2           **[ * ]**

 

3.2.1             **[ * ]**

 

3.2.2             **[ * ]**

 

3.2.3             **[ * ]**

 

3.3           **[ * ]**

 

4.0       Environmental and Storage Conditions

 

4.1           **[ * ]**

 

4.2           **[ * ]**

 

4.3           **[ * ]**

 

Please note that the information and recommendations in this documentare provided only as guidance to card manufacturers for use and application ofABNH HoloMagTM product.  Sinceactual manufacturing conditions may vary slightly for each card manufacturerand end user, which is out of ABNH’s control, some may require adjustments foruse.

 

----

*Confidential

 

----